GP is the largest mobile phone operator in Bangladesh, with 35 million subscribers and a market share of approximately 44% as of October 2011. It operates a GSM digital network in the 900MHz and 1800MHz frequency bands. GP has been a market leader in introducing new products and services in Bangladesh, including the installation of approximately 5,000 kms of optical fiber alongside railway and highways. This fiber ensures nation-wide transmission backbone (the largest in the country) as well as technological redundancy. GP is publicly listed on the Dhaka and Chittagong stock exchanges. GP’s largest shareholders are Telenor AS with 55.8% shareholding and Grameen Telecom with 34.2% shareholding. Telenor is the Norwegian state-owned carrier, with more than 135 million mobile subscribers in Norway, Sweden, Denmark, Hungary, Serbia, Montenegro, Thailand, Malaysia, Pakistan, India and Bangladesh, and 93 million mobile subscribers in 19 markets through its ownership in VimpelCom Ltd. Grameen Telecom is a non-profit organization, wholly owned by Grameen Bank, the internationally acclaimed microfinance pioneer in Bangladesh. Both shareholders have a deep commitment to GP and its mission to provide affordable telephony to the entire population of Bangladesh. The remaining 10% shares of the Company are owned by the general public and other institutional shareholders.

The total project cost is estimated at around $1.1 billion. The proposed IFC investment is a financial package of up to $300 million, comprising of a senior A Loan and Parallel Loans.

150.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	150.0
Equity

* These investment figures are indicative

The medium term capital expenditure program, which consists of network and capacity expansion, technological advancement, energy efficiency initiatives and improvement of services, is expected to be implemented across Bangladesh.

Bangladesh is an IDA country with nominal GDP per capita of around $550 for 2009. The country has one of the lowest teledensities (only 42%) and highest subscriber growth in the world. Since 2006, total number of subscribers has increased from 20 million to more than 65 million, with a significant impact on the economy in terms of aggregate investment, employment and productivity levels, particularly in rural areas. By further investing in network development, offering improved connectivity and additional services, GP will continue to assist Bangladesh to build its competitive strength. The Project will also enhance competition in the sector, leading other mobile operators to invest further in their networks, thereby increasing availability and improving the quality of cellular services and lower tariffs.

(i) Mobilize long-term financing: significant long-term financing is not available in Bangladesh, and IFC will act as the anchor lender in helping GP to raise long-term financing from DFIs in a challenging market; (ii) Strengthen partnership with an existing client: this would be IFC's 3rd financing with GP, who is undertaking initiatives related to climate change and mobile payments, areas in which IFC's advisory services may explore potential to add value. Furthermore, as the largest cellular operator in Bangladesh, GP is well positioned to lead the next step of improving operational efficiency among the operators (e.g. infrastructure sharing); and (iii) IFC's involvement includes a careful review of Environmental and Social standards and safeguards providing the Company with a stamp of approval on this front.

This is a Category B project according IFC’s Procedure for Environmental and Social Review of Projects.

Key risks and issues related to this Project include the Company''s systems, capacity and staffing to ensure that its operations are undertaken in a manner consistent with IFC PSs; fair, safe and healthy working conditions for the Company''s staff as well as the contractors'' workforce; utilization of equipment and operational practices that maximizes conservation of energy, water; management of air emissions, and solid and electronic/hazardous waste disposal; and mitigation of risks and impacts on community health, safety, security and transport infrastructure during construction and operation.

Further details on the potential environmental and social impacts of the project, corresponding mitigation measures and guidance on how and where information about the project are provided in the Environmental & Social Review Summary.